Balance Sheet and Value - 1691 Words

Learning Goal 6: Explain the relationships among financial decisions, return, risk, and the firms value. 1) Any action taken by the financial manager that increases risk will also increase the required return. True or False 2) In common stock valuation, any action taken by the financial manager that increases risk will cause an increase the required return. True or False 3) In common stock valuation, any action taken by the financial manager that increases risk will cause an increase in value. True or False 4) An action on the part of a firm that increases the level of expected cash flows without a corresponding increase in risk should reduce share value; An action that reduces the level of expected cash flows without a†¦show more content†¦True or False 6) The book value per share of common stock is the amount per share of common stock that would be received if all of the firms assets were sold for their accounting value and the proceeds remaining were divided among common stockholders. True or False 7) ________ is the value of the firms ownership in the event that all assets are sold for their exact accounting value and the proceeds remaining after paying all liabilities (including preferred stock) are divided among common stockholders. A) Liquidation value B) Book value C) The P/E multiple D) The present value of the common stock 8) ________ is the actual amount each common stockholder would expect to receive if the firms assets are sold, creditors and preferred stockholders are repaid, and any remaining money is divided among the common stockholders. A) Liquidation value B) Book value C) The P/E multiple D) The present value of the dividends 9) ________ is a guide to the firms value if it is assumed that investors value the earnings of a given firm in the same way they do the average firm in the industry. A) Liquidation value B) Book value C) The P/E multiple D) TheShow MoreRelatedThe Value Of The Balance Sheet1343 Words   |  6 PagesThe main purpose of the balance sheet is to reflect and explain the accounting equation: Assets = Liabilities + Owner’s Equity. This equation is the fundamental model for recording and reporting transactions. It is essentially useful for showing what the company owns, what the company owes, and what does the owner’s equity remains. The ordering of the assets and the liabilities help the user to assess the liquidity of the company. For our purpose focusing on Walt Disney World, we are primarily focusedRead MoreBalance Sheet and Fair Value1783 Words   |  8 Pagesbank reconciliation, Apex Company provided the ff. information Balance per bank statement 1,805,000 Deposit in transit 325,000 Return of customer’s check for 60,000 Insufficient fund Outstanding checks 275,000 Bank service change for August 10,000 On Aug 31, 2011, what is the adjusted cash in bank? a. 1, 855, 000 b. 1, 795, 000 c. 1, 785, 000 d. 1, 755, 000 3. Credit balances in Accounts Receivable shall be classified as a. Current Liabilities Read MoreAn Effective Way For Small Business Owners780 Words   |  4 Pageshave an accurate balance sheet that reflects the most current information available. By keeping this information up to date every quarter, you can help yourself avoid a lot of problems and surprises down the road. A balance sheet provides you with an at-a-glance summary of your company’s financial health as of a specific day. It is broken down into what the business’s assets are, what the business’s liabilities are, and the amount of owner or shareholder equity. The balance sheet gets its name fromRead MoreWhat Is The Assets Of A Company?1303 Words   |  6 Pagesin a balance sheet Assets = Liabilities + Equity (U.S. Securities, 2007, n.p.) and succinctly assets – liabilities = shareholders’ equity (Lumen, n.d.). A balance sheet is a financial statement that is basically a â€Å"financial snapshot of the organization at a certain date† (Bethel, 2017). A balance sheet, also called â€Å"the statement of financial position† is a critical document required in financial reporting for an organization (Lumen, n.d., n.p.). Like other financial statements, a balance sheetRead MoreFinancial Statement Analysis And Financial Statements1704 Words   |  7 Pagesassessment of the balance sheet components, income statement components and the fair value accounting system. Balance Sheet Balance sheets provides the snapshot of the overall financial position of an organization at a specific time especially the end of an accounting period (Haydon, Wicks, 1966). It shows the assets owned, liabilities and the shareholder’s equity. The balance sheet details can vary greatly based on the business size and complexity, however in general the balance sheet adheres to theRead MorePrudential Financial Inc.: Stockholders’ Equity and Balance Sheet Leverage1087 Words   |  5 PagesEquity and Balance Sheet Leverage 1. Compare the stockholders’ equity section of the balance sheet with the statement of stockholders’ equity. Describe in general terms how they relate. The Balance Sheet equity is a snapshot of the balances at book value of the funds contributed by the owners to finance operations, whereas the statement of stockholders’ equity shows a summary of the transactions which took place during a financial period, ie shows the movement. The closing balances in the statementRead MoreFinance Cas Study664 Words   |  3 Pagesto maximize its total market value, would you recommend that it issue debt or equity to finance the land purchase? Explain. If Stephenson wants to maximize its total market value it should use debt to finance the $100 million dollar purchase. By using the debt to finance it will decrease the overall taxable income the company reports. Since interest payments are tax deductible it will create a tax break for the company which will increase the overall total value of Stephenson Real Estate. Read MoreThe analysis and application of the balance sheet1732 Words   |  7 Pagesï » ¿ The analysis and application of the balance sheet Kuang xin Financial accounting is one of the most popular major in the world. In the study of accounting, people must know and use expertly the three accounting statement, balance sheets, cash flow, and income statement. It is the most basic and useful skill in one’s career of accounting. But in the four basic financial statement, the balance sheet or called statement of financial position is theRead MoreMULTIPLE CHOICE With Answers980 Words   |  4 Pagesï » ¿MULTIPLE CHOICE 1. The balance sheet reports a. assets. b. revenue. c. expenses. d. net income. ANS: A DIF: Easy OBJ: LO 5-1 MSC: AACSB Communication 2. The fourth pair of columns on a 10-column work sheet prepared at the end of the period would be the a. Income Statement columns. b. Adjustments columns. c. Balance Sheet columns. d. Adjusted Trial Balance columns. ANS: A DIF: Easy OBJ: LO 5-2 MSC: AACSB Communication 3. The third pair of columns on a 10-column work sheet prepared at the endRead MoreEssay on Case Study1053 Words   |  5 Pagesits total market value, would you recommend that it issue debt or equity to finance the land purchase? Explain. If Stephenson wishes to maximize the overall value of the firm, it should use debt to finance the $95 million purchase. Since interest payments are tax deductible, debt in the firm’s capital structure will decrease the firm’s taxable income, creating a tax shield that will increase the overall value of the firm. 2. Construct Stephenson’s market value balance sheet before it announces